Geithner: Banks negotiated intensely

Stress-test results showing major banks need to raise new capital were finalized after intense negotiation between the government and the banks, Treasury Secretary Tim Geithner told Charlie Rose in an interview taped on Wednesday.

“You’re going to hear criticism from both sides in this,” Geithner said. “A lot of people will say these were unfairly tough. … And there will be other people to say … that losses could be worse. And they may be right.”

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Offering reassurance, Geithner added later: “None of those 19 banks are at risk for insolvency.”

Geithner told Rose for his PBS program that through "disclosure and transparency," the results "will help lift this fog of uncertainty over the financial system, and I think the results will be, on balance, reassuring."

"What we did with the Fed is, for the first time ever, we brought the nation’s financial supervisors together, and in an unprecedented step, asked them to do a careful look under the hood, to take a careful look at ... how strong these institutions were in the event things got worse," Geithner said.

Geithner said that the Obama administration has responded to the financial crisis by “being dramatically more aggressive than I believe any serious government has ever been, certainly in generations, in responding to financial crises.

“So if you look at the scale of action, look at the quality of initiative we’ve taken, I think it dramatically exceeds even the best managed crises we’ve seen before. So we’re acting earlier and stronger in this case,” Geithner said in a transcript released by the program.

Asked whether the country will need another stimulus, Geithner said: “Nt at this stage, but that’s something we’ve got to keep an eye on, carefully. …I think that a big mistake governments make in coming out of these things is they tend to put the brakes on too early, draw back too quickly, prematurely try to exit, undo all these exceptional things you do to address a crisis … Now, we have to be prepared to do what’s necessary to get through this, and so we’ll keep watching closely, working with countries around the world so that … if we see signs of risk emerging again, things get frazzled again, we have to be prepared … to do what’s necessary.”

Here’s the exchange about stress tests:

Charlie Rose: We hear these kinds of stories coming out already from some of the banks, saying that there was intense negotiation because what the world was going to see was their balance sheet.